USA PATRIOT ACT

1
USA PATRIOT ACT

• 9th Annual Factoring ConferenceGrand America
  Hotel Salt Lake City, UTBrian J. Peretti,
  Esq. US Department of the Treasury Office of
  Critical Infrastructure Protection and Compliance
  PolicyFriday April 4, 2003

2
Office of Critical Infrastructure Protection and
Compliance Policy (OCIPCP)

• Protect Critical Infrastructure for Domestic
  Financial Institutions
• Identify the critical infrastructure
• Identify physical and cyber security
  vulnerabilities
• Ameliorate these vulnerabilities
• Evaluate the results of our efforts
• Money Laundering and Terrorist Financing
• USA PATRIOT Act
• Other applicable laws and regulations
• Personal Information Security
• Identity theft
• Privacy Issues
• Creation of Public/Private Partnership

3
USA PATRIOT ACT

• Uniting and Strengthening America by Providing
  Appropriate Tools Required to Intercept and
  Obstruct Terrorism
• New Anti-Money Laundering Procedures
• Title III International Money Laundering
  Abatement and Financial Anti-Terrorism Act of
  2001, amends Bank Secrecy Act
• Inspired by tragedy of September 11

4
Sections of Emphasis

• Section 326 Verification of Identification
• Section 352 Anti-Money Laundering Programs

5
Financial Institution

• Loan or finance company
• Factoring is included in the definition that is
  referenced in 4(k) of the Bank Holding Company
  Act of 1956

6
4 Elements

• Anti-Money Laundering Program
• Compliance Officer
• Training
• Independent Testing

7
Anti-Money Laundering Program

• Designed to prevent money laundering
• Must develop internal
• Policies
• Procedures
• Controls
• Risk based system
• Tailor it to your shop

8
Compliance Officer

• Must be someone that can answer questions from
  employees regarding the Anti-Money Laundering
  Program
• Is the contact point for the government
• Does not have to be a full time position

9
Training

• Must be effective training
• Where the risk is
• If they are responsible for the transaction, they
  must have the training

10
Independent Testing

• Used to make sure the Anti-Money Laundering
  Program works
• Doesnt have to be an outside person
• Must be independent of the Compliance Officer

11
Who do you apply the AMLP to?

• All parties to the transaction
• Client
• Debtor
• Your source of funds or investor

12
Timeframe

• Regulation is currently being drafted
• Will be released sooner rather than later
• Will provide ample opportunity to comply with it

13
What do we need from you?

• Review the regulation when it is released.
• Provide comments to International Factoring
  Association
• If questions, call either myself or Charles
  Klingman

14
US Department of the Treasury Contacts

• Office of Critical Infrastructure Protection and
  Compliance Policy (OCIPCP)
• Charles Klingman, OCIPCP
• Phone [phone] email charles.klingman_at_do.t
  reas.gov
• Brian Peretti, OCIPCP
• Phone [phone] email brian.peretti_at_do.trea
  s.gov